Tag Archives: value of information

When it comes to marketing and communications, information has a value that is very straight forward to calculate. All too often the cost to retrieve and share that information exceed its value, leading to a general consensus that measurement is expensive; a luxury that may fit in someone else’s budget but, with the limited resources in your hands, the money is better spent doing something rather than observing something.

Measurement shouldn’t be breaking the bank. If it is, then you are making one or more of the following mistakes.

You’re measuring and reporting too frequently

Those of you who are continually refreshing your social news feeds and compulsively checking your emails will understand what I’m talking about regarding the fear of missing out. There is an underlying anxiety that builds when we don’t know something and the need to check and check and check can be overwhelming. All the worse when this desire for an update is coming from several rungs up the ladder. This continual call for a report is being done to satisfy a curiosity rather than accomplish anything and it churns quickly through the dollars.

Your data retrieval ought to occur at an interval in which meaningful change will have occured. Rather than asking, are we there yet? “No.” are we there yet? “No.” are we there yet? “No.” are we there yet? “No.”are we there yet? “No.” are we there yet?

…it would be better to ask at the start, how long do we expect this trip to take? What’s the next turn? What’s the next stop? At each turn of the road a quick exam as to the conditions ahead. At each stop a quick view as to whether you’re making the time you thought you would and is there a change in route necessary? A few checks when they’re actually needed instead of an exhausting litany that can’t help but become just a droning background annoyance.

While your cadence for measuring should match the rate of any significant change occurring, your reporting should come in advance of any decision making process. That is when the information is actually needed. It makes no sense for hourly reporting to be going on through the wee small hours of the morning if everyone who could reasonably do something with that information is fast asleep. Better a single report timed to arrive as the decision makers are starting their day. Better yet, timed to arrive a few hours in advance of the weekly meeting where they make the actual decisions.

You’re being too precise in your measures

Do not forget why you are taking these measures. You are trying to make better decisions and this is the information that will help you do so. A lot of people end up chasing the numbers and losing sight of the decision.

Let’s say you are testing messaging in a new market in advance of a large campaign, and a quick poll of a few dozen people shows that 90% find your phrasing offensive. Well, a quick poll’s not very precise, is it? So let’s do some more formal focus group testing of a couple hundred people. From that testing, 85% found it offensive. That number’s different from the poll, and how precise are focus groups anyways? This campaign is important, and you really want to be sure, so you splurge on a large, random telephone survey of over 10,000. Now you have a really precise number. You know with 95% confidence and a small margin of error that the number who find your messaging offensive is 72.43%.

What was the acceptable number? Maybe you’re an edgy brand that embraces controversy and you’re willing to accept a number of people being turned off in exchange for the exposure. Most brands entering a new market want to be putting their very best face forward and would have little to no tolerance for offending potential customers.

Before the random survey, before the focus groups, before all of that additional expenditure chasing after a more precise number, it was obvious that there was a problem. The difference between 95% and 85% and 72.43% were not going to change that.

You are collecting information in order to make a decision. Once the decision is clear, you have all the information that you require.

You’re not measuring against your objectives

What are you trying to achieve? What is the change in the market that your actions are intended to make? What decisions need to be made? If you don’t know the answer to these, you will not know what you need to measure.

Not knowing what to measure leads people to try and measure everything in hopes that they will capture something of value. The resulting reports are number soups filled with some information that’s interesting and a great deal that is irrelevant. But without knowing your objectives, there is no way to know what information is important.

It may be interesting to know that 5% of your website visitors are using their mobile device from the bathroom: an odd factoid. However, if you’re in the middle of a campaign and you know that 30% of your visits are coming from a single media market where you’ve been doing a heavy push on daytime radio, that’s important. That will help you make decisions as to what to do next and where to push your resources.

Much as there’s always more precision to be had, there will always be more information to be had. You could keep at it until you’ve burned through the budget ten-fold and still have new avenues to chase down for more information. So to keep from breaking the bank, you want to focus your measurement on the important over the interesting.

In short…

Start from a solid objective and ensure your measures are against that objective.

Don’t let perfect be the enemy of good. Choose your tools and methods so that you get enough information to make your decisions accurately.

Set a cadence in lockstep with the precision you need and report on it as the decisions need to be made.

Follow those three steps and you’ll not only have the information you need to make better decisions, but the extra dollars in the budget to act on that information.

When it comes to public relations and marketing, there is a lot of focus on determining the return on investment (ROI) of tactics, campaigns and strategies. But what is often missing is the ROI for the measurement itself.

As a brand manager, you can feel pretty burnt when you’ve devoted thousands of your budget this quarter to research and what comes back is a spiral bound pamphlet of a PowerPoint deck spewing a lot of things that you already had a strong gut feeling for.

It can be pretty daunting when your agency recommends a measurement approach that’s in the tens of thousands. Those are dollars that could be directed towards additional tactics.

How do you know that your research has any real value? How do you know that the information is worth what you are paying for? What is the ROI for having research and measurement in place?

This is actually a very straightforward calculation to make. You simply need to answer:

How confident are you that you are making the right decision?

How much do you stand to benefit from being correct?

What will it cost you if you are wrong?

Say you’re running a million dollar campaign to drive trial of a product; the goal being to bring in new customers. You’re targeting a demographic several steps removed from yourself and so while you are liking the direction that’s being taken there is some doubt whether it will resonate with your intended customers.

The value of having perfect information, of making all the right decisions and no strategic missteps is the sum of the costs and the gains:

The cost of being absolutely wrong is $1M: the cost of your campaign. You spend your money, keep yourself, your team and your agencies busy for a couple of weeks and change nothing.

With the lifetime value of a customer and knowing the intended goals for reach and conversion of the campaign you can estimate what you stand to gain if your decisions are right. In this example, we’ll say that comes to $5M.

Suddenly the value of information becomes very tangible in dollars and cents and you can begin to make informed decisions as to whether it is worth the cost to pursue.

There is no such thing as perfect information. But we all have a solid sense of how confident we are before pulling the trigger.

If you were 95% certain that you were making the right call, then there is very little value in further validation. But if you’re making a call that will determine millions of dollars and you’re feeling it’s a coin toss as to whether you’re right, suddenly a few thousand to validate those decisions becomes the bargain of the century.